Generally good start to the year puts forecast of 1% growth for this year under pressure. The economy is expected to return to slower growth in 2017. High inflation and public debt are structural risks for economic growth in the medium to longer term.

The French economy performed very well in the first quarter of 2016 but ground to a halt in the second quarter. Any recovery is unlikely to dent the high unemployment figure and will thereby not save President Hollande in time for elections.

We expect that UK’s vote to leave the EU will negatively affect economic growth in the eurozone. We believe that the impact in 2016 is rather small, but we lower our growth forecast for 2017 for both the eurozone and the Netherlands by ¼%-point.